Let’s compare what the BLS and Department of Labor say to reality.
PCE is the BLS Personal consumption Expenditures price index, the Fed’s preferred measure of inflation.
In nominal terms, the four-year gain in wages is 23.4 percent. In real (inflation-adjusted) terms it’s a gain of 4.6 percent.
As I explain below, that gain is imaginary. And people know that even if economists don’t.
QCEW Wages
QCEW stands for Quarterly Census of Employment and Wages
The Quarterly Census of Employment and Wages (QCEW) program publishes a quarterly count of employment and wages reported by employers covering more than 95 percent of U.S. jobs, available at the county, MSA, state and national levels by industry.
The QCEW consists of 12.2 million establishments in the first quarter of 2024.
QCEW is 95 percent coverage of jobs. The Nonfarm payroll report surveys ~629,000 establishments with a response rate of 42.6 percent as of March 2025.
Thus, QCEW is a less timely but far more accurate representation of the labor market than the monthly nonfarm payroll jobs report.
The spotlight on this post is wages.
New QCEW Data
Today the Department of Labor released Quarterly Census of Employment and Wages for the first quarter of 2025.
The data is not seasonally adjusted but it could be and should be.
QCEW Real Wages Percent Change from Year Ago
Compared to 2024 Q1 real weekly wages are up 1.56 percent and total wages are up 2.18 percent.
The difference is in the number of people working.
How Wrong is the BLS on Real Wages?
The short answer is very. The alleged 4.6 percent rise in real wages is not only anemic, it’s imaginary.
The BLS is wrong in its calculation of housing expenses and meals. I have discussed both recently.
The BLS gives food at home a much higher percentage of the CPI than food away from home but the UDSA says the opposite. The USDA includes tax and tips, the BLS doesn’t.
The BLS PCE price index does not include the price of housing (only rent). Nor does it include property taxes, or homeowners’ insurance (only content insurance).
Is Homeowners Insurance Understated in the CPI? Shop Around!
On August 11, asked Is Homeowners Insurance Understated in the CPI? Shop Around!
If you own a home, what percent of your income is spent on your homeowners’ insurance? Under 1/2 of 1 percent?
Not Counted
The BLS does not include insurance in the CPI [or PCE] as the average person understands insurance.
Nor does the BLS include property taxes or home prices directly.
Also on August 11, 2025, I noted Over Half the US Has Major Stress Over the Price of Food
Are you stressed out over food?
For more on the BLS food weights vs the USDA, please see my August 12, 2025 post Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?
Does the BLS match your budget?
Actual vs Predicted Consumer Sentiment Is a Big Hoot
To tie everything together please see my September 8, 2025 post Actual vs Predicted Consumer Sentiment Is a Big Hoot
Economists think people should be happy. They aren’t.
Economists think people should be happier because like the Fed, they are clueless about inflation.
Real wages are down over the last four years no matter what the economists think and the BLS says.
Not at all.
I make zero$/hr.
Permanently unemployed and planning to stay that way.
then how do you live?????
Living on the dole: Social Security – $60K/yr
Pension: $5K/yr, no COLA
Extractions from tIRAs: $66K/yr
I feel for anyone with the financial savvy to find, read, and understand this blog who is also working for wages.
Americans’ Wages Haven’t Kept Up With Inflation Since Biden Was Elected
OT comedy from Simplicius:
“Without hesitation Macron has appointed Sebastien Lecornu as new prime minister, the same Lecornu who has been the defense minister of France for years, and under whose “leadership” the French military was sent packing from Africa, leading to the slow unraveling of the decaying former-power. “
mish, enough stats
post about
=South Korean Companies Have Been Playing Fast And Loose With Visas, Won’t Hire American Workers For US Factory Construction= form zh
=====
basically THERE WILL BE NO NEW JOBS IN USA, CAUSE they will be taken / done by foreigners cause the are no qualified people in USA
all those investing numbers in 100xx blilions are bu11llsh111it
alx
Don’t get me started.
Several times in different jobs in my career, execs insisted we not hire local anymore and offshore through a company they picked. Surely faked resumes. Shitty or no output. My own management seemed sympathetic to the offshoring firm’s local excuse-maker. Since there was no chat program at the time I started waiting up until after midnight to call and try to help in real time. Remote workers unavailable *EVERY* time I called. (“Out sick today.” “Sick relative needed help.” Never an email telling me this in advance. Learned these events only when I called.). Succeeded in firing the specific workers, though management never seemed to appreciate what I was doing. Worse, wasn’t the offshoring firm culpable here? They don’t ensure attendance by their own workers? Why was my employer paying the offshoring firm’s local reps more hourly than they paid me? I had a local/remote team that include up to 4 offshore staff, kept trying to work with every new person they assigned to replace the last one, but got absolutely nothing of them.
Despite all this, I saved a product line.
Punch line: After I left the job, they lost that business. (But I bet my managers and the shitty offshore firm kept their jobs.)
I’m sure things changed in the past 15 years. Hopefully harder for fraudsters. But, given stories in the news, fraudsters find ways to stay in business. 😉
I’m actually not against offshoring work. But when an offshoring firm knows its clients are fools, the firm took the money and gave nothing.
Offshoring IT hiring best practices (my advice):
1) Let new hires do some test with coding, see how good they are (genious ones usually guys).
2) If they bluff, pretend to be dumb – have them keep digging.
3) Go for communicative, non-arrogant people (dames score higher usually).
4) Talking “dames”, at least in India they switch jobs less often.
Offshore firm will start doing a bit of pre-selection after the first rejects.
I mentioned “I’m sure things changed in the past 15 years”, because this was 20 years ago. Phone interviews only.
Even then, I kept declining candidates until my boss started concluding *I* was the problem. (Just like you giving me advice, everyone starts offering suggestions like they think the person complaining wouldn’t have thought of some things, That goes all the way up the management chain. In the end, the execs discount the complaints so heavily that they disregard them. Why? Because they think the local employees are just trying to sabotage their effort, whereas the truth is I was working hard to make the company money because I presumed they’d reward employees who save product lines and save them money.). My boss told me “just train”. So I relented and tried. After a while, I just did all the work myself instead of complaining (about them not learning) and being given more suggestions that were not only useless but cost me time — time I needed to save the product.
Agree with everything you wrote though. +1
How Much Is Inflation Reducing Your Hourly Wages?
===
common mish. you are smarter than this
INFLATION DOES NOT REDUCE Hourly Wages! ACTUALLY it ups NOMINAL wages
I bet by end of Weimar republic each worker made millions or trillions marks per month!
=====
INFLATION REDUCES PURCHASING POWER if/when inflation is bigger than your quarterly/ yearly wage raise
and WE KNOW ANSWER:
LOOK AT NEW CARS SALES AND-OR NEW HOME SALES CHART-
MULTI DECADES LOW..!!!
THUS , PURCHASING POWER IS MULTI DECADES LOW
facts matter.
alx
Excellent example of how to be a pedant, well done, thanks for illustrating
In Arkansas it isn’t inflation dropping wages, it’s Trump policies. It’s so bad 5 people have killed themselves according to one lady in the video below. The commentary is amazing.
https://www.youtube.com/watch?v=AhSGGPf-Jmw
Why go out alone? Be part of the solution.
Five less MAGA voters is part of the solution.
True colors right there as a human being with that comment.
Who the fuck wants to be on your side of anything when you make comments like that?
Wishing people people dead because you do not like them.
Typical liberal today. All inclusive until you disagree on anything with them. Then the cult party members sick the media on you and destroy you
And now we have people like you wishing them dead.
Whose the low life here?
Sides? You think I’m picking sides? Have you not been paying attention…all I want is economic stability and profits. There are no sides, neither political party gives a damn about you and the suicides are 100% proof in deep red Arkansas that overwhelmingly supported Trump and now he’s cutting them off at the knees to the point where they ended their lives.
He’s already cut medicaid, started death panels on medicare and it’s only a matter of time social security is cut. Expect more blood on Trump/GOPs hands on this along with all the war mongering.
And I never said I wished anyone dead, that’s YOUR interpretation. Those people are gone and there is nothing I can do about it, the net result however is that there are less MAGA supporters now and let’s hope their sacrifice wasn’t in vain and it moves the needle in the right direction.
Death panels again? guessing he will cut social security?. He already said he is trying to strengthen the program
War mongering? The only one that wants to stop the war in ukraine out of our last 3 presidents is Trump.
Israel oh please thats been going on forever.
And now we have another psycho liberal that just murdered a Trump voter
Better hope its not because he thought his social security was going to be cut.
“typical liberal today” is a pejorative with zero intellectualism and is not going to get you anywhere in conversation. I guess you want to stoop down to his level?
A typical liberal today wants men in your daughters bathroom
Hysterically lies about things trump may do. like cutting social security. And if cutting medicare means kicking illegals out of the country then so be it.
Cutting medicare to liberals is cutting the 25% increase for 2026 down to a 15% increase. Thats cutting?
Trump is a Nazi
Elon is a Nazi
Trump is a pedophile
Crime, what crime?
Russia Russia Russia…. lies lies lies
You appointed judges across the country that should not be in a courtroom, unless they are on trial themselves
Thats the just off the top of my head. Oh, and gets their news from the NYTimes, CNN & MSNBC
neither one that had the guts to report on a brutal murder in North Carolina.
How the hell do you know whats really going on when someone else has to tell you?
What do we do Mish? How do we get ourselves out of this pickle?
sorry pumpkin . nothing can be done . this ship sailed. titanic already been hit.
i think tipping point was iraq and bush jr
trump , obama , biden , etc are just afterthoughts
Yes, the endless globalized “war on terror” and the GFC were body blows to our finances and ways of life. The public destroyed its own balance sheets in that era, which transferred to today’s massive public debt. But many other tributaries fed into that already. Staying absolutely anchored on the mid-20th century psychologically is getting harder. I downsized my whole footprint starting in the 1990’s, which has made adjustments a lot easier. I am holding my own despite few rises in pay — even nominally — since then. Expecting a bunch of frivolities (useless “innovations,” etc.) was first to go. The Paleo lifestyle rules!
In the runup to 2008, the casino economy reached the public via housing (banks + gov + fake money). Now the new Trump-family-affiliated coin launched, headed by the son of Donald’s old golfing pal and Middle East envoy. Every smartphone soon will have wall to wall gambling on anything. So predation has been updated and granularized right down to the envy and misplaced “ambitions” of every insecure punter. I expect a rise in sidewalk dwellers secondary to this: a new fentanyl for some. It is about deeply discounting the future, and monetizing that digitally, as a business model.
The sign on the ship “Mission Accomplished”.
or
i remember some Iraqi person threw a shoe at bush jr (aka imbecile)
that was high point of USA empire.
you sure it wasn’t when McCain sang “Bomb bomb bomb, bomb bomb Iran?”
The only valid measure of inflation is YoY change in money per capita.
Of course you can discuss if you need M0, M1, M2 or something else but the trend is that this money growth is way way higher than the inflation number, and more relevant. The only reason why a dollar has a certain value is its scarcity.
In Europe, ChatGPT came up with doubling the per capita from 2013 to 2025.
Too bad we cannot be like China and have deflation and stop being hit with persistent inflation. LOL
———————————————
China’s consumer prices fell more than expected in August while deflation in wholesale prices persisted, as calls mounted for Beijing to ramp up measures to bolster sluggish domestic demand and cushion weakening exports growth.
The consumer price index dipped 0.4% last month from a year earlier, according to data from the National Bureau of Statistics released Wednesday, compared with Reuters-polled economists’ forecast for a 0.2% contraction.
The producer price index dropped 2.9% in August from a year ago, in line with economists’ estimates and has stayed flat on a month-on-month basis.
Deflation in consumer durables, which could serve as a better guide to gauge the broader price pressures, deepened to 3.7% last month, from 3.5% in July, according to the estimates by Zichun Huang, China economist at Capital Economics, who said the level of deflation was more severe than seen during the 2008 financial crisis.
Buying heavily discounted Russian oil and foodstuffs gas advantages,
I used to give a monthly compound dollar devaluation report every month just based on CPI. My last report of June 2024 stated a four year compound inflation rate of 22.84%. Since my last report some 15 months ago, I discontinued my efforts because the CPI did not reflect my personal experience, and did not reveal that dollar devaluation was more severe than was being stated. I was unwittingly running cover, and doing somewhat of a psy-op for a failing empire that more and more neglected the needs of sound business. I was almost in character with an ex WWII pilot who played the part of a bank manager in the holiday story I think called “He sure has A Wonderful Wife” which falsely indicated that Banks lend savings.
It wasn’t a bank. Barrymore had that. But most people don’t make that distinction.
Was it a credit union or savings and loan?
– In nominal terms, the four-year gain in wages is 23.4 percent. In real (inflation-adjusted) terms it’s a gain of 4.6 percent. > Exactly, as most of the younger specifically, are making quite a bit more than they were 1-3 Years ago.
– As I explain below, that gain is imaginary. And people know that even if economists don’t. > So true
– Economists think people should be happier because like the Fed, they are clueless about inflation. > I’m not happy at all. I’m on a fixed income and in the past few years, I have seen prices skyrocketing in various areas. Trades are killing me, with Carpenter’s, Electrician’s, Plumber’s all seemed to become much more expensive due to inflation, but have not yet subsided in the least.
>> Add the cost of Dental and Healthcare, along with your various Insurances and you are already digging deep. Don’t forget Water & Electricity, as those two have climbed via a pact it seems. None of these have come down as well.
>>>>Have we got to Food, not needed, while we were NOT noticing all of these prices slowly rising, and then exploding higher, all we heard talked about was “Egg Prices” and “Cereal and Bread” was next. I have found Food to be the least of my worries. Protein is in all sorts of things now. Carbs from Potatoes or Pasta, Veggies if possible grow some, and know your stores delivery for them too. Older but sellable, are perfect for smoothies. Etc.
– “Real wages are down over the last four years” > Totally Agree!!
My hourly wages went up 11% 6 months ago so no complaints here. I’m a courier working for a Pathology Lab. I asked wow is this bc of the tariffs? And he chuckled and said no that it was bc I was doing a good job
People that don’t suck or becoming increasingly rare.
Real QCEW (brown): up to $1169 in Q1 2020, down a little, up to $1300 in Q4 2020, down a little… Since Q2 2023 it’s all higher highs and higher lows. QCEW in nominal terms are all higher highs and higher lows ==> the trend is up !
Between Mar 2020 and Aug 2025 hourly wages were up from $28.74 to $36.53. They are rising faster then between 2006 and 2019, though their rise is slowing down lately, but not by much. Add: self employed, in the black, transfer money, the military…including discouraged people that will come, total income is rising fast ==> payroll and sale taxes will rise, along with tariffs, a smaller gov, student loans, lower rates…
BLS doesn’t give a holistic summery.
Thank you Mish for putting into words that a lot of us already feel but haven’t been able to get that message across.
Tax bite goes up along with inflated wages and mere daily existence requires more and more auto pay, massive internet connection, minimum this and that, fees. The loss of *spendable* wage is way worse than that plot.
The BLS gives food at home a much higher percentage of the CPI than food away from home but the UDSA says the opposite. The USDA includes tax and tips, the BLS doesn’t.
Of course they don’t. The BLS takes every opportunity to minimize inflation to reduce SS COLA increases. And their inflation factors into all sorts of things, including Fed policy making.
As for the 4.6%, I’d say this is accurate for the middle 50% quartile. For the bottom 25%, they’re under water over the last 4 year, while the top 25% quartile’s real wage gains are closer to the 23.4%.
You’re right. Eating away at the SS COLA increases is part of the plan.
Obvious, I guess: outright insolvency would be worse.
Inflation Erased U.S. Income Gains Last Year
Inflation Erased U.S. Income Gains Last Year – WSJ (archive.ph)